Public-private plan for reservoir has its supporters

In four years, 100 million gallons of water a day — about the same amount of water currently slurped by Atlanta — could be flowing into the city’s pipes. Nary a public penny would be spent on the estimated $650 million project. Atlanta would earn some much-needed cash from the property’s sale.

And, perhaps the best part, a new Georgia water source could come on line just as Atlanta loses access to hundreds of millions of gallons of Lake Lanier.

“This project is so large and unique, but we’re ready to move forward,” said Brooke Anderson, general manager of the Etowah Water and Sewer Authority. “Time is of the essence. We’ve just got to work out a deal with Atlanta and it’s off to the races we go.”

Not so fast.

Construction of the Shoal Creek Reservoir faces myriad, possibly insurmountable financial, regulatory, environmental, legislative and legal challenges. Never before has a public-private partnership built such a large, expensive reservoir. Fears of private ownership of a natural resource — water — abound.

Atlanta officials have reacted cautiously, yet favorably to the project, but they appear in no hurry to meet Anderson’s end-of-the-year contractual deadline. Navigating an ocean’s worth of federal and state permits could take years. And, sure as water flows downhill, Alabama and other downstream communities would sue to stop the diversion of the Etowah’s headwaters.

“From a planning standpoint it just doesn’t make sense,” said Joe Cook, executive director of the Coosa River Basin Initiative, whose jurisdiction includes the Etowah River. “You’d be shipping water to a region that’s already overburdened [with development]. It would also mean less water coming down the river to meet the needs of Cherokee County, Cartersville and Cobb County and, ultimately, Rome.”

The reservoir proposal is the latest, though not necessarily the strangest, use for the Dawson Forest 50 miles north of Atlanta. In 1956, the Lockheed Aircraft Corp. turned hilly farmland below Dawsonville into a nuclear aircraft testing laboratory. Nuclear-powered planes never panned out, yet the Georgia Department of Natural Resources continues to monitor the site for radiation. The “hot cell building” and “cooling-off area” sit behind a fence topped with barbed wire.

Atlanta bought the property in 1971, along with another 10,000-acre tract in Paulding County, as possible locations for a second airport. Dawson Forest today is a lovely spot for birding, hunting, hiking and horseback riding managed by the Georgia Forestry Commission.

The Etowah River and Shoal and Amicalola creeks run through the property. It is also one of the largest contiguous tracts of North Georgia forest not owned by the state or federal government. Anderson adds that the absence of homeowners makes the Dawson Forest an ideal spot for a reservoir.

Anderson and Jerry Daws, an Atlanta developer of warehouses and industrial parks and the project’s fund-raiser, envision damming Shoal Creek for a 2,000-acre reservoir, leaving the remaining 8,000 acres in pristine perpetuity. They would build a water treatment plant, pump station and 38-mile-long pipe to tie in with Atlanta’s water works in Sandy Springs.

Pickens, Paulding and Cherokee counties, along with Cumming, Johns Creek and Milton, could tap into the system. The Etowah Water Authority would own and manage the reservoir. Daws’ Republic Resources Inc. would finance the estimated $600 million to $650 million project with revenue bonds backed by the sale of water.

“Clearly, as governments become more taxed for their dollars, you’ll find the private sector stepping in to help fund these infrastructure projects,” Daws said. “Roads, airports and other big projects have gone private. Reservoirs are the next step.”

Oilman and investor T. Boone Pickens, for example, plans to finance a water pipeline extending from West Texas to Dallas or San Antonio. Closer to home, Hall County officials and private landowners hope to build an 800-acre reservoir in the Glades Farm community that would produce 6.4 millions gallons of water daily.

“Given Judge Magnuson’s order, we have an emergency here for which we need creative solutions,” said Lee DeHihns, a partner with Alston & Bird and former top federal environmental official in Atlanta. “How we acquire water to supplement what we get out of the Chattahoochee River and Lake Lanier shouldn’t matter if it’s financially sound.”

U.S. District Judge Paul Magnuson ruled in July that metro Atlanta illegally taps Lake Lanier for drinking water. He gave the region three years to work out a water-sharing deal with Alabama and Florida, which also depend on the river for various industrial and environmental needs. Without a deal, Magnuson said he’ll drastically reduce metro Atlanta’s withdrawals from Lanier.

Shoal Creek “is clearly part of the solution,” Daws said. “This won’t be the only project necessary to mitigate [Magnuson’s] impact. But this would go a long way. It’s a significant start.”

Maybe not. Shoal Creek feeds the Etowah, which flows into Lake Allatoona, which leads to the Coosa River and, eventually, Alabama. Alabama has sued the U.S. Army Corps of Engineers over the diversion of Allatoona’s water for metro Atlanta. It has also sued the corps for allowing the creation of Hickory Log Creek Reservoir — another lake that taps the Etowah.

“Alabama doesn’t object to Atlanta building reservoirs to help alleviate the area’s reliance on a federal reservoir,” said Todd Stacy, a spokesman for Alabama Gov. Bob Riley. “However, Alabama cannot accept the building of a new reservoir that would simply add to the problem.”

Daws and Anderson could also face legal and legislative challenges trying to ship water from one river basin (the Coosa) to another (the Chattahoochee). Metro Atlanta’s water district prohibits the interbasin transfer of water into its district.

Legal challenges are likely to slow down an ambitious 3.5-year time frame. Anderson hopes the Atlanta City Council will approve the project by month’s end and a sale can be finalized by year’s end.

After that, acquiring permits — from the state’s Environmental Protection Division, the U.S. Environmental Protection Agency, the Army Corps of Engineers, the Fish and Wildlife Service and others — shouldn’t take more than 18 months, Anderson added, with construction of the reservoir, pump station and pipes completed by mid-2013.

Construction on the 410-acre Hickory Log Creek Reservoir, by comparison, started in 2005, but it won’t be filled with water until mid-2011. The minimum $100 million project will provide 40 million gallons daily for Cobb County’s water authority and the city of Canton.

“And if the Dawson Forest site is such a great location for a reservoir, why would the city of Atlanta, a longtime water supply operator, hand it over to a private company with no experience?” asked Sally Bethea, executive director of the Upper Chattahoochee Riverkeeper.

Claire Muller, an Atlanta City Council member who is chairwoman of the transportation committee, which has jurisdiction over the airport, said construction by the city of a reservoir on the site “could be a possibility as well.” She added, though, that the financially strapped city doesn’t have $600 million for a reservoir.

Muller also said that proceeds from the property’s sale wouldn’t flow into the city’s general fund — police and firefighters wouldn’t be hired — but instead remain with the airport authority. And Atlanta may want to preserve some of the Dawson Forest for its intended use: another airport or, at least, runway.

The project “has some real possibilities. We want to continue to talk to them about it,” Muller said. “But there’s a lot yet to be found out.”

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